Strong labor report could lead to bigger Fed hikes

CNBC’s Jim Cramer told investors on Monday that a key labor report could help guide the Federal Reserve’s inflation strategy.

“We need to see the unemployment rate go up, while wages remain stable and we get meaningful layoffs in some industries. If that doesn’t happen, if the numbers are really strong, then Fed chiefs will come out of the woodwork. and start talking about how we need bigger rate hikes,” he said.

Shares slid to start the week on Monday, weighed down by protests over China’s Covid restrictions that erupted over the weekend.

The Labor Department is expected to release the November nonfarm payrolls report on Friday and could close out what could be a tough week for the market, according to Cramer. “Depending on the season, it tends to be a bit weaker, before things really pick up in December,” he said.

He also previewed next week’s earnings list. All earnings and income estimates are courtesy of FactSet.

Tuesday: Business Day, CrowdStrike

Working day

• Third Quarter 2023 Earnings Release at 4:00 p.m. ET; conference call at 4:30 p.m. ET
• Projected EPS: 84 cents
• Projected revenue: $1.59 billion

Cramer predicted it would be difficult for the company to top its “spectacular” last quarter.

CrowdStrike

• Third Quarter 2023 Earnings Release at 4:05 p.m. ET; conference call at 5 p.m. ET
• Projected EPS: 48 cents
• Forecast revenue: $788 million

He said he wanted to see if the company could transition from a pure growth play to a profitable growth name.

Wednesday: Hormel Foods, Petco, Salesforce, Okta

Hormel Foods

• Fourth Quarter 2022 Earnings Release at 6:30 a.m. ET; conference call at 9 a.m. ET
• Projected EPS: 50 cents
• Projected revenue: $3.38 billion

Hormel could follow other food stocks that have stopped falling, Cramer said.

petco

• Third Quarter 2022 Earnings Release at 7:30 a.m. ET; conference call at 8:30 a.m. ET
• Projected EPS: 16 cents
• Projected revenue: $1.49 billion

He said he feared the company would report disappointing results.

Selling power

• Third Quarter 2023 Earnings Release at 4:05 p.m. ET; conference call at 5 p.m. ET
• Projected EPS: $1.22
• Projected revenue: $7.83 billion

Cramer said he didn’t expect co-CEO Marc Benioff to “tolerate” the stock being one of the worst performers on the Dow Jones Industrial Index.

Okta

• Third Quarter 2023 Earnings Release at 4:05 p.m. ET; conference call at 5 p.m. ET
• Projected loss: loss of 8 cents per share
• Forecast revenue: $591 million

“Like so many Silicon Valley companies, I think Okta is going to have to learn to live with less. [workers],” he said.

Thursday: Dollar General, Kroger, Ulta Beauty, Marvell Technology

General dollar

• Third Quarter 2022 Earnings Release at 6:55 a.m. ET; conference call at 10 a.m. ET
• Projected EPS: $2.54
• Projected revenue: $9.42 billion

Cramer pointed out that while analysts like the stock, products in the company’s stores are more expensive than before.

Kroger

• Third Quarter 2022 Earnings Release at 8:00 a.m. ET; conference call at 9 a.m. ET
• Projected EPS: 82 cents
• Projected revenue: $33.99 billion

While the company will likely have a good quarter, people will only care about the status of the company’s planned merger with Albertsons, he said.

Ultimate beauty

• Third Quarter 2022 Earnings Release at 4:00 p.m. ET; conference call at 4:30 p.m. ET
• Projected EPS: $4.13
• Projected revenue: $2.21 billion

Cramer said he expects a huge increase in company profits.

Marvell Technology

• Third Quarter 2023 Earnings Release at 4:05 p.m. ET; conference call at 4:45 p.m. ET
• Projected EPS: 71 cents
• Forecast revenue: $1.80 billion

While he believes in the stock, it likely won’t skyrocket until the industry-wide chip glut is resolved, he said.

Disclaimer: Cramer’s Charitable Trust owns shares of Salesforce.